Posted by Gemma Ospedale, Partner
Holiday pay should include commission
A case which has been running through the UK Courts and has now reached the ECJ, Lock v British Gas Trading Limited and others (about which the Advocate General’s Opinion was reported in the December 2013 edition of the Update), has now had judgment delivered by the ECJ. In short, it follows the Advocate General’s Opinion that, where a worker’s pay normally includes commission, and their remuneration has, as an integral part of it, a commission element, the figure used for calculating their holiday pay should be their full remuneration including commission and not reduced to the basic pay element. It found that the worker only received basic pay for taking holidays in circumstances where their normal remuneration included a significant amount of commission. Since they would therefore be significantly worse off if they took holiday, it was likely to deter them from exercising their right to annual leave. It also held that the fact that the reduction occurs after the period of annual leave is irrelevant.